Okay, it is unseemly for companies struggling to survive in the current environment to be spending a fortune on fancy retreats and corporate jets to fly executives to them. This would be an excellent time for management to actually look at the costs and benefits of using chauffeured cars and executive jets. From the outside, it seems likely that these expenses have gotten out of line, so it’s important that those in charge actually run the numbers.
Is it absurd to pay tens of millions of dollars for jets, and ongoing staff costs for pilots and limo drivers? Probably not, at least in the general case. If an executive is making phone calls during his drive to work, something that may well be illegal soon if he’s driving the car, the company very well may come out ahead to send a car around every morning. Anybody who has dealt with commercial air travel recently knows what a huge chunk of time is involved in flying anywhere, and how unlikely it is that the time spent can be used for much of anything other than opening the airline peanuts. At a certain level, it may be economically sound to spend the money and protect the executives’ time.
Even if a straight cost/benefit analysis doesn’t pencil out for the jets in terms of executive salaries saved, it’s entirely possible that the CEO’s job simply can’t be done without them. In the case of the CEO, each company only has one. If it is important that the CEO spend time in the field, and make public appearances, it’s quite possible that adding the time for commercial air travel will simply result in more days worked than there are in a year.
We don’t know the numbers and the tradeoffs. It’s not our job, it’s the job of the managers in each company. Do we really believe that the requisite analysis is consistently done? No, we don’t, and we think this is an area that needs to be monitored by the directors. On the other hand, we’re pretty sure the news media and the federal government aren’t equipped to do this analysis either. It definitely isn’t a good sign when the country’s CEO starts lecturing corporate CEOs on the point, not when he has a bigger retinue than any titan of industry, and his executive jet is a 747 known as Air Force One.